Review 85th Swiss Real Estate Talk

"Data doesn't solve problems - people solve problems."

Anyone who still had doubts as to whether digitization had "arrived" in the Swiss real estate industry was proven wrong last Wednesday in Zurich. Right on time for the start of the 85th Swiss Real Estate Talk, the congress hall of the Zurich restaurant was packed. By choosing the topic "How data is changing the real estate industry", the organizers once again struck a nerve in the industry. Digitalization is making the (fully) automatic collection and processing of information possible. However, collecting data alone is not conducive to solving problems, explained Daniel Baur, the first speaker of the evening. "Data per se does not make a company great," said the CEO of PropTech startup eMonitor, which focuses on digital leasing processes, among other things. Signals can be recognized from the data, but in order to derive an action, a strategy from it, further information, market knowledge and know-how are needed. What is required is an evaluation, the analysis of the data in a context to be determined by the "user." "Data doesn't solve problems - people solve problems," Baur said. But even though there are no quantitatively measurable target groups ("How do you measure the demand for energy-efficient housing?"), and the real estate industry is always building for the future, which is difficult to predict, data analysis - provided the systems used for this purpose are precisely configured - can be used to very accurately capture the prevailing needs in the housing market.

Baur used the production of new housing as an example to explain this: If, for example, thousands of interested parties apply for a low-cost apartment in a new construction project of a housing cooperative and only one in a hundred of them can get a place, the question arises: How does the apartment get to the "right" tenant? "Comprehensive data analysis can be used to match the person with the apartment they most deserve," says Baur. A machine does not select subjectively, but truly objectively: "With humans, this knowledge is lost, but the software can be continuously optimized. Optimization runs through a technical system much more efficiently than with humans. That's a big advantage."

By means of comprehensive data analysis and reporting functions, eMonitor can make tenant and applicant data available and provide clear reporting, by means of which investors and owners such as pension funds can make future investment decisions and avoid loss-making projects - in other words, realize exactly those projects in the future that are actually in demand.

The needs of B2B and B2C are compatible

"Big Data does not mean that the sheer volume of data is the relevant factor," Patrick Schmid followed up on the previous speaker's remarks. "Bad data leads to bad decisions," said the co-CEO of Zurich-based mortgage and real estate services provider Avobis. Innovations in the field of artificial intelligence make it possible to identify and realize new market potential or to better assess and reduce risks - and not least to increase efficiency and quality.

Over the past ten years, Avobis has built up the most comprehensive real estate and parcel search engine in Switzerland on the basis of over 100 data sources, says Schmid: "Every parcel and every property in Switzerland that is or was advertised on any platform is listed in it." Combined with AI, he said, this has also resulted in a valuation and analysis tool, as well as its own micro-location rating. "For example, we know exactly which buildings are where, how good the location and tax situation are, which construction projects are planned and which properties are or were on the market at which prices," Schmid said. The transparency created in this way makes it easier to understand and anticipate market trends - enabling customers to make future-proof investment decisions in order to optimize their returns.

In this way, the needs of B2B and B2C can be met in equal measure. The interests of professional market players, for example in residential construction ("high returns with a manageable risk"), can be reconciled with those of private residents ("a beautiful home at low costs") through the highest possible market transparency - for example, by recognizing and avoiding building what the user does not want.

However, Schmid admitted that there are limits. An AI-based pricing tool could certainly map 0815 apartments well, but this does not apply to special cases, so-called edge cases, said the Avobis co-CEO: "Even with the best data basis - the decision-maker always remains the human being."

Present complex issues in a simple way

Jelena Radovic, Head of Real Estate Marketing at Implenia Schweiz AG, gave a very clear presentation on the advantages that digitization brings for the planning and construction of real estate, virtually over the entire life cycle. Along the entire value chain - starting with the acquisition of suitable land and properties, through development, marketing and construction, to management - the processes are significantly simplified and accelerated compared to the procedures that were common not so long ago. To illustrate this, Jelena Radovic mentioned corresponding tools from, for example, Luucy, Archilyse or Pricehubble, to name just a selection.

Among other things, these tools make it possible to "place" a planned project in its existing real environment by means of its digital 3D twin - or to evaluate the building floor plans according to numerous spatial qualities, which in total greatly accelerates the evaluation of project proposals in an architectural competition. Compared to the "classic study competition" with architectural models, the visualization of a project idea allows the project to be viewed from the inside and outside, as well as the resulting interactions with existing buildings (lighting conditions/shading) to be examined, and also so-called hotspots (schools/kindergarten, shopping facilities, etc.) to be integrated. Furthermore, 3D visualizations of projects could be combined with their expected construction costs determined via AI tools, as well as with profitability calculations. "For the plausibility of a project, this is highly advantageous," says the Implenia expert. Data can bring about objectivity and increase efficiency - provided there is a clear question, structured recording, meaningful mapping and continuous interpretation as well as acceptance of the data-bound statements.

Conclusion of the 85th Swiss Real Estate Talk: The intelligent linking of data enables the provision of new technologies for improved seller-buyer matching, for example, as well as intelligent building technologies that simplify property management and administration; they are also the basis for AI-based tools that allow investors and project developers to perform insightful analyses. Nevertheless - and the speakers agreed on this - the human being should always retain the decision-making authority. Or, as Jelena Radovic said, "In the end, it's always a bit subjective."

The 86th Real Estate Meeting will be held on May 17, 2022.